System, method, and apparatus for providing a prediction-based marketplace

ABSTRACT

Provided is a system, method, and apparatus for implementing a prediction-based marketplace. For example, the system may include one or more processing units operable to: receive a prediction for an outcome of an event from a seller, determine a price to offer the prediction for sale to the buyer, provide the prediction to a buyer, receive an indication by the buyer to purchase the prediction, process a payment from the buyer to purchase the prediction, determine the actual outcome of the event that is predicted, compare the actual and predicted outcomes of the event; and distribute the payment in a manner so that the buyer and seller each receive a portion of the payment based on the comparison of the actual and predicted outcomes.

PRIORITY CLAIM

This application claims the benefit of U.S. Provisional Application No.61/639,996, filed on Apr. 30, 2012, which is hereby incorporated byreference.

FIELD OF THE INVENTION

The present invention is generally related to prediction-basedmarketplaces. For example, an embodiment of the present invention isrelated to a prediction-based marketplace for financial instruments.

BACKGROUND

Provided is a prediction-based marketplace. While some existingprediction-based marketplaces may be adequate in some respects, theremay be alternative prediction-based marketplaces that are advantageousin other respects. The present disclosure, for example, may provide aprediction-based marketplace where buyers (e.g., consumers) may purchase(e.g., for monetary payment or another type of consideration) aprediction for the outcome of an event.

The present disclosure provides a prediction-based marketplace that mayprovide pricing or valuation, for the predictions, that may be based onobjective information. For example, in one embodiment, aprediction-based marketplace may provide predictions for the prices(e.g., opening, high, low or closing [OHLC] price) of financialinstruments. In that scenario, the prediction-based marketplace mayprovide pricing or valuation of a prediction for that financialinstrument based on the historical pricing (e.g., closing or openingprices) of that financial instrument.

Further, the present disclosure provides a prediction-based marketplacethat may credit a portion of the purchase price back to the buyer, orconsumer, of a prediction. For example, in one embodiment, aprediction-based marketplace may provide the buyer with a portion of theamount that the buyer paid for the prediction of an event outcome (e.g.,the OHLC price of a financial instrument) based on the actual outcome ofthe event (e.g., the actual OHLC price of the financial instrument). Inthat scenario, the prediction-based marketplace may provide the buyerwith a portion of the purchase price for a prediction that may not beentirely accurate. In some instances, the amount of the credit to thebuyer may depend on the direction of the prediction. For example, theamount of the credit to the buyer may depend on the direction of theprediction relative to the direction of the actual outcome of the event.Further, the prediction-based marketplace may distribute the purchaseprice for predictions among the owner or operator of the marketplace(e.g., market maker), the consumers (e.g. buyers), and suppliers (e.g.,providers of predictions) in a manner that depends on the actual outcomeof the event.

SUMMARY OF THE INVENTION

In one embodiment, included is a website to publish, for example,today's OHLC price forecasts of any tradable financial instrument suchas, but not limited to, stocks or bonds. The website may be a securewebsite.

There may be one or more browser versions offered such as a regularbrowser version for desktops and laptops, and a mobile browser versionfor mobile devices, for example, smart phones and tablets. Further,there may be an application that may be offered for computing devicessuch as desktops and laptops, as well as an application for mobiledevices such as smart phones and tablets.

In an embodiment, for any financial instrument, the user can be apredictor, or supplier, (who forecasts, for example, today's OHLC priceof a given instrument) and/or a buyer, or consumer, of thosepredictions.

For example, the predictor's goal is to forecast a daily (e.g., today's)OHLC price for a given instrument within ±P % of the actual OHLC price.P is a variable that may be set, for example, by a market maker thatprovides the marketplace. Alternatively, P may vary according to otherfactors. Further, P may be set by other market participants, forexample, the consumers and suppliers.

To establish a track record for a given instrument, each predictor maypublish free forecasts for that instrument for N number of days; e.g.,any buyer can buy forecasts per instrument per predictor for the first Ndays without any charge.

After these free forecasts, for example, the buyers will pay X amountper forecast per predictor where X is, for example, the maximum between0.1% (10 basis points) of some base price such as yesterday's closing ortoday's opening price of the instrument depending on the time of theforecast and some minimum amount M that may depend on the country wherethe instrument is located; for example, in the United States, M could beone US Dollar where as in India, M could be ten Indian Rupees.

For any instrument, it's possible that a predictor may start with acertain prediction and as the day (or during an alternative timeinterval for which the forecast was made) progresses, he/she may changeit to tune his/her forecast. The buyer may pay for any given predictiononce and may not have to pay for the subsequent revisions of thatprediction during the day. In alternative embodiments, the buyer mayhave to pay for a subsequent revision of that prediction during the day(or during an alternative time interval for which the forecast wasmade).

In each payment of X, the website, (e.g., the market maker, or owner oroperator of the website) may keep C % of X.

At the end of the day (or at the end of an alternative time interval forwhich the forecast was made), if the forecasted price falls within ±P %of the actual OHLC price, the predictor may get the remaining (100 minusC) % of X per forecast. If the forecasted price falls outside of ±P % ofactual OHLC price but has “good direction”, the predictor may keep G %of X and the buyer may get back (100 minus C minus G) % of X. Gooddirection, for example, may mean the predicted OHLC price and the actualOHLC price moved in the same direction with respect to some base pricesuch as the opening price for today or the closing price for yesterdaydepending on when the prediction was made. If the forecasted price fallsoutside of ±P % of OHLC price and has “bad direction”, the predictor maykeep B % of X and the buyer may get back (100 minus C minus B) % of X.Bad direction, for example, may mean the predicted OHLC price and theactual OHLC price moved in different directions with respect to somebase price such as the closing price for yesterday or the opening pricefor today depending on when the prediction was made.

In one embodiment, provided is a system and method for implementing aprediction-based marketplace. For example, the system may include one ormore processing units operable to: receive a prediction for an outcomeof an event from a seller, determine a price to offer the prediction forsale to the buyer, provide the prediction to a buyer, receive anindication by the buyer to purchase the prediction, process a paymentfrom the buyer to purchase the prediction, determine the actual outcomeof the event that is predicted, compare the actual and predictedoutcomes of the event, and distribute the payment in a manner so thatthe buyer and seller each receive a portion of the payment based on thecomparison of the actual and predicted outcomes.

In another embodiment, provided is a method comprising receiving aprediction for an outcome of an event from a seller, determining a priceto offer the prediction for sale to the buyer, providing the predictionto a buyer, receiving an indication by the buyer to purchase theprediction, processing a payment from the buyer to purchase theprediction, determining the actual outcome of the event that ispredicted, comparing the actual and predicted outcomes of the event, anddistributing the payment in a manner so that the buyer and seller eachreceive a portion of the payment based on the comparison of the actualand predicted outcomes.

In yet another embodiment, provided is an apparatus comprising one ormore computer-readable storage structures for storing a plurality ofcomputer instructions executable by a processor, the plurality ofcomputer instructions including: instructions for receiving a predictionfor an outcome of an event from a seller, instructions for determining aprice to offer the prediction for sale to the buyer, instructions forproviding the prediction to a buyer, instructions for receiving anindication by the buyer to purchase the prediction, instructions forprocessing a payment from the buyer to purchase the prediction,instructions for determining the actual outcome of the event that ispredicted, instructions for comparing the actual and predicted outcomesof the event, and instructions for distributing the payment in a mannerso that the buyer and seller each receive a portion of the payment basedon the comparison of the actual and predicted outcomes.

BRIEF DESCRIPTION OF THE DRAWINGS

FIG. 1 is a diagrammatic representation of a system in which anembodiment of the present invention may be implemented.

FIG. 2 is a diagrammatic representation of another system in which anembodiment of the present invention may be implemented.

FIG. 3 is a diagrammatic representation of yet another system in whichan embodiment of the present invention may be implemented.

FIG. 4 is a flowchart of an embodiment of a method for providing aprediction-based marketplace.

FIG. 5 is a flowchart of an alternative embodiment of a method forproviding a prediction-based marketplace.

FIG. 6 is a flowchart of an embodiment of a method for pricing aprediction.

FIG. 7 is a flowchart of an alternative embodiment of a method forpricing a prediction.

FIG. 8 is a flowchart of an embodiment of a method for distributing apurchase price to a buyer and predictor.

FIG. 9 is a flowchart of an alternative embodiment of a method fordistributing a purchase price to a buyer and predictor.

FIG. 10 is a flowchart of an alternative embodiment of a method forproviding a prediction-based marketplace.

FIG. 11 is a flowchart of an embodiment of a method for distributing apurchase price to a market maker, buyer, and seller.

FIG. 12 is a flowchart of an alternative embodiment of a method fordistributing a purchase price to a market maker, buyer, and seller.

FIG. 13 is a flowchart of an embodiment of a method for providing aprediction-based marketplace for financial instruments.

FIG. 14 is a flowchart of an embodiment of a method for pricing aforecast for a financial instrument.

FIG. 15 is a flowchart of an embodiment of a method for distributing apurchase price for a forecasted OHLC price of a financial instrument toa buyer and provider.

FIG. 16 is a flowchart of a method for determining the direction of aforecasted OHLC price of a financial instrument.

DETAILED DESCRIPTION OF THE PREFERRED EMBODIMENTS

FIG. 1 is a diagrammatic representation of a system 10 in which anembodiment of the present invention may be implemented. System 10includes a server 12 that is in communication with a database 13. Theserver 12 is also in communication with a network 17. In someembodiments the network 17 may include the internet. In alternativeembodiments, the network may include a wide-area-network (WAN). Infurther embodiments, the network may include a local-area-network (LAN).In other embodiments, the network may be a different type of network.The system 10 further includes a plurality of clients 18 that mayinclude clients 1, 2, . . . , L, where L may be an arbitrary number ofclients. The plurality of clients 18, for example, may include computingdevices. In one embodiment, one or more of the clients 1, 2, . . . , Lof the plurality of clients 18 may include a desktop computer. Further,in an embodiment, one or more of the clients 1, 2, . . . , L of theplurality of clients 18 may include a server. In an alternativeembodiment, the plurality of clients 18 may include a mobile computingdevice such as a mobile phone or tablet, or any other mobile computingdevice. The plurality of clients 18 may be in communication with thenetwork 17. The plurality of clients 18 and server 12 may communicatethrough the network 17. The server 12 may provide an application, suchas a web-based application, that may allow the client 18 to interactwith the server 12 and database 13. Further, in some embodiments one ormore of the clients 1, 2, . . . , L of the plurality of clients 18 mayuse a browser to interact with the server 12. In some embodiments, oneor more of the clients 1, 2, . . . , L of the plurality of clients 18may use an application to interact with the server 12.

In further embodiments, the server 12 and database 13 may communicatesecurely. Further, one or more of the server 12 and database 13 maycommunicate securely with one or more of the clients 1, 2, . . . , L ofthe plurality of clients 18. For example, in one instance the system 10may include secure network infrastructure. For example, the system 10may include a firewall or other type of secure network infrastructure.In an alternative embodiment, the system 10 may include secure featuressuch as encryption and decryption schemes to provide security, over amedium that may or may not already be secure. Further, secure featuresmay be distributed.

In addition, the system 10 of FIG. 1 may reside within or may beoperated by an organization and/or one or more of its affiliates. Forexample, the system 10 may reside within or may be operated by anorganization and/or one or more of its affiliates that may be associatedwith, for example, the financial services industry. In this scenario,the server 12, database 13, and plurality of clients 18 may residewithin the organization and/or one or more of its affiliates or may beoperated by the organization and/or one or more of its affiliates. Thenetwork 17 may be a network that is operated by the organization and/orone or more of its affiliates, for example, an intranet, WAN, LAN, orother type of network. On the other hand, the system 10 of FIG. 1 may bedistributed across several organizations or entities. Further, server12, database 13, and plurality of clients 18 may be controlled oroperated by different organizations or entities.

FIG. 2 is a diagrammatic representation of another system 22 in which anembodiment of the present invention may be implemented. System 22 issimilar to system 10 of FIG. 1. Common reference numerals are used todescribe similar components. For sake of simplicity, the discussion ofFIG. 2 focuses on the differences. System 22 includes another server 24.Server 24 may be in communication with the network 17. Further, system22 includes another database 26. The database 26 may be in communicationwith the server 24. The server and database pair 24, 26 may be incommunication with the server 12 through the network 17. The server 12may communicate with the server 24 and database 26 to receiveinformation related to events. For example, in one embodiment thedatabase 26 stores information relating to financial instruments. Inalternative embodiments, the database 26 stores information relating toother events. Further, in some embodiments one or more of the clients 1,2, . . . , L of the plurality of clients 18 may use a browser tointeract with the server 24. In other embodiments, one or more of theclients 1, 2, . . . , L of the plurality of clients 18 may use anapplication to interact with the server 24.

In further embodiments, one or more of the servers 12, 24 and databases13, 26 may communicate securely. Further, one or more of the servers 12,24 and databases 13, 26 may communicate securely with one or more of theclients 1, 2, . . . , L of the plurality of clients 18. For example, inone instance the system 10 may include secure features such as securenetwork infrastructure. For example, the system 10 may include afirewall or other type of secure network infrastructure. In analternative embodiment, the system 10 may include other secure featuressuch as encryption and decryption schemes to provide security, over amedium that may or may not already be secure. Further, secure featuresmay be distributed.

In addition, the system 22 of FIG. 2 may reside within or may beoperated by an organization and/or one or more of its affiliates. Forexample, the system 22 may reside within or may be operated by anorganization and/or one or more of its affiliates that may be associatedwith, for example, the financial services industry. In this scenario,the servers 12, 24, the databases 13, 26, and plurality of clients 18may reside within the organization and/or one or more of its affiliatesor may be operated by the organization and/or one or more of itsaffiliates. The network 17 may be a network that is operated by theorganization and/or one or more of its affiliates, for example, anintranet, WAN, LAN, or other type of network. On the other hand, thesystem 22 of FIG. 2 may be distributed across several organizations orentities. Further, the servers 12, 24, the databases 13, 26, and theplurality of clients 18 may be controlled or operated by differentorganizations or entities.

FIG. 3 is a diagrammatic representation of yet another system 29 inwhich an embodiment of the present invention may be implemented. System29 is similar to systems 10 and 22 of FIGS. 1 and 2, respectively.Common reference numerals are used to describe similar components. Forsake of simplicity, the discussion of FIG. 3 focuses on the differences.As compared to the systems 10 (FIG. 1) and 22 (FIG. 2), the system 29includes a plurality of processing units. Further, the plurality ofprocessing units may be distributed. For example, the system 29 mayinclude a secure network 31 that may be in communication with thenetwork 17. The secure network may include a plurality of servers 33 anda plurality of databases 35. The plurality of servers 33 and databases35 may be distributed. For example, the plurality of servers 33 anddatabases may be distributed geographically. Further, for example, theplurality of servers 33 and databases 35 may be distributed in terms ofcomputational and storage capacity, respectively. Moreover, the servers33 and databases 35 may be distributed in yet other ways. The system 29further includes a plurality of clients 18 that may include clients 1,2, . . . , L, where L may be an arbitrary number of clients. Theplurality of clients 18 may be in communication with the network 17.Further, the plurality of clients 18 may be in communication with thesecure network 31. The plurality of clients 18 may communicate with theplurality of severs 33 and the plurality of databases 35. For example,in an embodiment, the plurality of servers 33 may provide anapplication, such as a web-based application, that may allow any one ormore of the clients 1, 2, . . . , L of the plurality of clients 18 toindividually interact with any one or more of the servers and databasesof the plurality of servers and databases 33 and 35.

In further embodiments, the secure network 31 may be one secure network.In alternative embodiments, the secure network 31 may include aplurality of secure networks that may include one or more servers of theplurality of servers 33 and one or more databases of the plurality ofdatabases 35. In some embodiments, the one or more secure networks maybe distributed. For example, one or more secure networks may bedistributed geographically. Moreover, for example, a plurality of securenetworks may be in the same location, or one or more of the plurality ofsecure networks may be in different locations. Further, for example, oneor more secure networks may be distributed in terms of bandwidth,computational and storage capacity.

Moreover, the secure network 31 may include secure networkinfrastructure. For example, the secure network 31 may include afirewall or other type of secure network infrastructure. Alternatively,the secure network may include secure features such as encryption anddecryption schemes to provide security, over a medium that may or maynot already be secure. For example, the secure network 31 may useencryption and decryption to provide security between one or more of theplurality of clients 26, plurality of servers 33, and plurality ofdatabases 35.

In addition, the system 29 of FIG. 3 may reside within or may beoperated by an organization and/or one or more of its affiliates. Forexample, the system 29 may reside within or may be operated by anorganization and/or one or more of its affiliates that may be associatedwith, for example, the financial services industry. In this scenario,the plurality of servers 33, the plurality of databases 35, and theplurality of clients 18 may reside within the organization and/or one ormore of its affiliates or may be operated by the organization and/or oneor more of its affiliates. The network 17 may be a network that isoperated by the organization and/or one or more of its affiliates, forexample, an intranet, WAN, LAN, or other type of network. On the otherhand, the system 29 of FIG. 3 may be distributed across severalorganizations or entities. Further, the plurality of servers 33, theplurality of databases 35, and the plurality of clients 18 may becontrolled or operated by different organizations or entities.

FIG. 4 is a flowchart of an embodiment of a method 40 for providing aprediction-based marketplace. The provider of the prediction-basedmarketplace may be, for example, a market maker. In an embodiment, themethod 40 begins at block 42 to present for purchase a forecast for anoutcome of an event. The method 40 then proceeds to block 44 to receivefrom a buyer a purchase request for a forecast for the outcome of anevent. The method 40 then advances from block 44 to block 46 where themethod 40 credits a portion of the purchase price, for example a definedpercentage of the purchase price (e.g., C %), to the market maker andreserve the remaining amount of the purchase price (e.g., (100−C) %) forthe buyer and predictor. The defined percentage of the purchase price(e.g., C %) may be determined, for example, by the market maker. Inalternative embodiments, the defined percentage of the purchase price(e.g., C %) may be determined by a consumer or buyer of the forecast. Inyet another embodiment, the defined percentage of the purchase price(e.g., C %) may be determined by a predictor of the forecast. In furtherembodiments, the defined percentage of the purchase price (e.g., C %)may be determined by a combination of the market maker, the consumer orbuyer, and the predictor. In some embodiments, the defined percentage ofthe purchase price (e.g., C %) may be determined in other ways.

In alternative embodiments, as will be discussed below with respect toFIGS. 10-12, a method for providing a prediction-based marketplace maycredit the market maker in a different sequence. From block 46, themethod 40 then continues to block 48 and determines the actual outcomeof the forecasted event. Further, the method 40 proceeds to block 50 andcredits the amount of the remaining purchase price (e.g., (100−C) %)that is due to the buyer and predictor, depending on the actual outcomeof the forecasted event.

FIG. 5 is a flowchart of an alternative embodiment of a method 52 forproviding a prediction-based marketplace. The method 52 is similar tothe method 40 of FIG. 4. Common reference numerals are used to describesimilar blocks of the methods. For sake of simplicity, the discussion ofFIG. 5 focuses on the differences. In an embodiment, the method 52 firstbegins at block 54 (instead of block 42 of FIG. 4) and receives from apredictor a forecast for an outcome of an event. The method 52 thenproceeds to block 56 and stores the forecast for the outcome of theevent. The method 52 then continues to block 58 and determines the offerprice of the forecast. After block 58, the method goes on to blocks42-50 as described above with respect to FIG. 4.

FIG. 6 is a flowchart of an embodiment of a method 60 for pricing aprediction. For example, pricing of a prediction may be based onobjective information related to a forecasted event. In an embodiment,the method 60 includes block 62 and determines pricing of the forecastbased on a maximum of, a minimum forecast price (e.g., M) and anotherprice that depends on objective information relating to the event. Theminimum forecast price is a price that may be determined, for example,by the market maker. In alternative embodiments, the minimum forecastprice may be determined by a consumer or buyer of the forecast. In yetanother embodiment, the minimum forecast price may be determined by apredictor of the forecast. In further embodiments, the minimum forecastprice may be determined by a combination of the market maker, theconsumer or buyer, and the predictor. In some embodiments, the minimumforecast price may be determined in other ways. Moreover, the objectiveinformation relating to the event may include historical data related tothe event. In the alternative embodiments, the objective information mayinclude other information related to the event.

FIG. 7 is a flowchart of an embodiment of a method 64 for pricing aprediction. For example, pricing of a prediction may be based onhistorical data related to a forecasted event. In an embodiment, themethod 64 begins at block 66 and receives or gets the historical datafor the event. Then the method 66 continues to block 68 and determinespricing of the forecast based on a maximum of, a minimum forecast price(e.g., M) and another price that depends on objective informationrelating to the event. The minimum forecast price is a price that may bedetermined, for example, by the market maker. In alternativeembodiments, the minimum forecast price may be determined by a consumeror buyer of the forecast. In yet another embodiment, the minimumforecast price may be determined by a predictor of the forecast. Infurther embodiments, the minimum forecast price may be determined by acombination of the market maker, the consumer or buyer, and thepredictor. In some embodiments, the minimum forecast price may bedetermined in other ways.

FIG. 8 is a flowchart of an embodiment of a method 80 for distributing apurchase price to a buyer and predictor. The method 80 starts at block82. From block 82 the method continues to block 84 where the method 80determines whether the forecasted outcome is within a defined range(e.g., ±P %) of the actual outcome. The defined range (e.g., ±P %) maybe determined, for example, by the market maker. In alternativeembodiments, the defined range (e.g., ±P %) may be determined by aconsumer or buyer of the forecast. In yet another embodiment, thedefined range (e.g., ±P %) may be determined by a predictor of theforecast. In further embodiments, the defined range (e.g., ±P %) may bedetermined by a combination of the market maker, the consumer or buyer,and the predictor. In some embodiments, the defined range (e.g., ±P %)may be determined in other ways.

At block 84, if the method 80 determines that the forecasted outcome iswithin a defined range (e.g., ±P %) of the actual outcome, the method 80then proceeds from block 84 to block 86. At block 86, the predictorreceives the remaining balance of the purchase price (e.g., (100−C) %)and the buyer gets back nothing. Then the method 80 continues to block94 where the method 80 ends. On the other hand, if at block 84 themethod 80 determines that the forecasted outcome is outside the definedrange (e.g., ±P %) of the actual outcome, the method 80 then proceedsfrom block 84 to block 92. At block 92, the predictor gets B % of thepurchase price and the Buyer gets back a portion of the purchase price(e.g., (100−C−B) %). Then the method 80 continues to block 94 where themethod 80 ends.

The values C and B may be a defined percentage of the purchase price(e.g., C % and B %) and one or both may be determined, for example, bythe market maker. In alternative embodiments, one or both of the definedpercentages of the purchase price (e.g., C % and B %) may be determinedby a consumer or buyer of the forecast. In yet another embodiment, oneor both of the defined percentage of the purchase price (e.g., C % and B%) may be determined by a predictor of the forecast. In furtherembodiments, one or both of the defined percentage of the purchase price(e.g., C % and B %) may be determined by a combination of the marketmaker, the consumer or buyer, and the predictor. In some embodiments,one or both of the defined percentage of the purchase price (e.g., C %and B %) may be determined in other ways.

FIG. 9 is a flowchart of an alternative embodiment of a method 101 fordistributing a purchase price to a buyer and predictor. The method 101is similar to the method 80 of FIG. 8. Common reference numerals areused to describe similar blocks. For sake of simplicity, the discussionof FIG. 9 focuses on the differences. The method 101 starts at block 105and then proceeds to block 84. If at block 84 the method 101 determinesthat the forecasted outcome is within a defined range (e.g., ±P %) ofthe actual outcome, then the method proceeds to block 86, as discussedabove. After block 86, the method ends at block 113. On the other hand,if at block 84 the method 101 determines that the forecasted outcome isoutside the defined range (e.g., ±P %) of the actual outcome, then themethod proceeds to block 107. At block 107, the method 101 determineswhether the forecasted outcome is in a good direction. If at block 107,the method 101 determines that the forecasted outcome is in a gooddirection, then the method 101 proceeds to block 109 where the predictorgets, for example, a defined percentage (e.g., G %) of the purchaseprice and the buyer gets back a portion of the purchase price (e.g.,(100−C−G) %). From block 109 the method continues to the end at block113.

The defined percentage of the purchase price, (e.g., G %), may bedetermined, for example, by the market maker. In alternativeembodiments, the defined percentage of the purchase price, (e.g., G %)may be determined by a consumer or buyer of the forecast. In yet anotherembodiment, the defined percentage of the purchase price, (e.g., G %)may be determined by a predictor of the forecast. In furtherembodiments, the defined percentage of the purchase price, (e.g., G %)may be determined by a combination of the market maker, the consumer orbuyer, and the predictor. In some embodiments, the defined percentage ofthe purchase price, (e.g., G %) may be determined in other ways.

On the other hand, if at block 107, the method 101 determines that theforecasted outcome is in a bad direction, then the method 101 proceedsto block 111 where the predictor gets, for example, a defined percentage(e.g., B′%) of the purchase price and the buyer gets back a portion ofthe purchase price (e.g., (100−C−B′) %). From block 111, the method 101continues to the end at block 113.

The defined percentage of the purchase price, (e.g., B′%), may bedetermined, for example, by the market maker. In alternativeembodiments, the defined percentage of the purchase price, (e.g., B′%)may be determined by a consumer or buyer of the forecast. In yet anotherembodiment, the defined percentage of the purchase price, (e.g., B′%)may be determined by a predictor of the forecast. In furtherembodiments, the defined percentage of the purchase price, (e.g., B′%)may be determined by a combination of the market maker, the consumer orbuyer, and the predictor. In some embodiments, the defined percentage ofthe purchase price, (e.g., B′%) may be determined in other ways.

FIG. 10 is a flowchart of an alternative embodiment of a method 132 forproviding a prediction-based marketplace. The method 132 begins at block135 and receives a prediction for an outcome of an event from a seller.In some embodiments, the prediction is received from a predictor orthird party that is different from the market maker. In otherembodiments, the market maker may provide predictions of its own. Inthat scenario, the method 132 at block 135 may receive a prediction foran outcome of an event from a seller that includes the market maker. Themethod 132 continues from block 135 to block 137. At block 137 themethod determines a price to offer the prediction for sale to a buyer.Then the method proceeds to block 139 and provides for sale theprediction to the buyer. From block 139 the method continues to block141 where the method 132 receives an indication by the buyer to purchasethe prediction. In some embodiments, the indication by the buyer topurchase the prediction includes a promise or guarantee that the buyerwill pay for the purchase price of the prediction at a later time. Forexample, while the buyer may indicate their interest to purchase theprediction, their payment may be processed after the outcome and amountowed is determined. In some embodiments, the indication by the buyer topurchase the prediction includes payment for the prediction.

The method 132 proceeds from block 141 to block 143. At block 143, themethod 132 processes a payment from the buyer. In some embodiments, suchas when the indication by the buyer to purchase the prediction includesa promise or guarantee that the buyer will pay for the purchase price ofthe prediction at a later time, the method 132 processes the paymentassociated with this indication. For example, in some embodiments, themethod 132 debits an account of the buyer by the amount of the purchaseprice for the prediction that the buyer has indicated their interest topurchase. In other embodiments, such as when the indication by the buyerto purchase the prediction includes payment for the prediction, themethod 132 processes the payment.

From block 143, the method 132 continues to block 145 and determines theactual outcome of the event that is predicted. After that, the method132 proceeds to block 147. At block 147, the method 132 compares theactual and predicted outcomes of the event. Then the method 132 goes onto block 149 and distribute the payment among the market maker, buyer,and seller based on the comparison of the actual and predicted outcomes.

FIG. 11 is a flowchart of an embodiment of a method 156 for distributinga purchase price to a market maker, buyer, and seller. The method 156 issimilar to the method 80 of FIG. 8. Common reference numerals are usedto describe similar blocks. For sake of simplicity, the discussion ofFIG. 11 focuses on the differences. Generally, the method 156distributes the purchase price among the market maker, buyer, andpredictor. Whereas, the method 80 (FIG. 8) begins after the market makerhas been credited a portion of the purchase price and thus, the method80 distributes the remaining balance of the purchase price to thepredictor and buyer. In more detail, the method 156 starts at block 158.Then the method 156 proceeds to block 160 where a portion of thepurchase price, for example a defined percentage of the purchase price(e.g., C %) is credited to the market maker and the remaining amount ofthe purchase price (e.g., 100−C) % is reserved for the buyer and seller.As discussed above, the defined percentage of the purchase price (e.g.,C %) may be determined by different market participants, eitherseparately or in combination, or may be determined by entirelyunaffiliated entities, and in other ways.

From block 160 the method 156 continues to block 84 to determine whetherthe forecasted outcome falls within a defined range (e.g., ±P %) of theactual outcome. As discussed above with respect to method 80 of FIG. 8,the method 156 may then proceed to either of blocks 86 and 92, and thento the end of the method 156 at block 162.

FIG. 12 is a flowchart of an alternative embodiment of a method 165 fordistributing a purchase price to a market maker, buyer, and seller. Themethod 165 is similar to the method 101 of FIG. 9. Common referencenumerals are used to describe similar blocks. For sake of simplicity,the discussion of FIG. 12 focuses on the differences.

Generally, the method 165 distributes the purchase price among themarket maker, buyer, and predictor. Whereas, the method 101 (FIG. 9)begins after the market maker has been credited a portion of thepurchase price and thus, the method 101 distributes the remainingbalance of the purchase price to the predictor and buyer. In moredetail, the method 165 starts at block 167. Then the method 165 proceedsto block 160 where a portion of the purchase price, for example adefined percentage of the purchase price (e.g., C %) is credited to themarket maker and the remaining amount of the purchase price (e.g.,100−C) % is reserved for the buyer and seller. As discussed above, thedefined percentage of the purchase price (e.g., C %) may be determinedby different market participants, either separately or in combination,or may be determined by entirely unaffiliated entities, and in otherways.

From block 160 the method 165 continues to block 84 to determine whetherthe forecasted outcome falls within a defined range (e.g., ±P %) of theactual outcome. The method 165 may continue to block 86, as discussedabove with respect to method 101 of FIG. 9, and then end at block 169.Also, the method 165 may continue to block 107, and then end to eitherof the blocks 109 and 111, as discussed above with respect to method 101of FIG. 9. From either of the blocks 109 and 111, the method 165proceeds to block 169 and ends.

FIG. 13 is a flowchart of an embodiment of a method 176 for providing aprediction-based marketplace for financial instruments. The method 176begins, for example, at block 180 where the method 176 receives aforecasted OHLC price of a financial instrument. The method 176 thenproceeds to block 182 and determines a price to offer the forecastedOHLC price of the financial instrument. From block 182 the methodcontinues to block 184 where the method 176 provides for sale to a buyerthe forecasted OHLC price of the financial instrument. The method 176then continues to block 186 and receives an indication by the buyer topurchase the forecasted OHLC price of the financial instrument. Fromblock 186, the method 176 advances to block 188 and processes a paymentfrom the buyer to purchase the forecasted OHLC price of the financialinstrument. The method 176 then proceeds to block 190 and determines theactual OHLC price of the financial instrument. The method 176 continuesto block 192 where the method 176 compares the actual and forecastedOHLC prices of the financial instrument. Then, the method 176 moves toblock 194 and distributes the payment among the market maker, buyer, andseller based on the comparison of the actual and forecasted OHLC pricesof the financial instrument.

FIG. 14 is a flowchart of an embodiment of a method 196 for pricing aforecast for a financial instrument. The method 196 begins, for example,at block 198. At block 198 the method 196 gets historical data forfinancial instrument. The method 196 proceeds to block 200 anddetermines pricing of the forecast based on a maximum of, a minimumforecast price (e.g., M) and another price that depends on thehistorical data related to the event (e.g., 0.1% of closing or openingprice).

FIG. 15 is a flowchart of an embodiment of a method 201 for distributinga purchase price for a forecasted OHLC price of a financial instrumentto a buyer and provider. The method 201 starts, for example, at block205. The method 201 proceeds to block 207 where a portion (e.g., C %) ofthe purchase price of the forecast is credited to the market maker andthe remaining amount of the purchase price (e.g., 100−C) % is reservedfor the buyer and the provider of the forecasted OHLC price of thefinancial instrument. The method 201 then continues on to block 209 anddetermines whether the forecasted OHLC price is within a defined range(e.g., ±P %) of the actual OHLC price. If the method 201 determines thatthe forecasted OHLC price is within a defined range (e.g., ±P %) of theactual OHLC price, then the method 201 continues to block 86. At block86 the provider receives the remaining balance of the purchase price(e.g., (100−C) %) and the buyer receives nothing. From block 86 themethod 201 proceeds to block 213 that is, for example, the end of themethod 201. On the other hand, if the method 201 determines that theforecasted OHLC price falls outside a defined range (e.g., ±P %) of theactual OHLC price, then the method 201 continues to block 211. At block211 the method 201 determines whether the forecasted OHLC price moved ina good direction. If the method 201 determines that the forecasted OHLCprice moved in a good direction relative to the actual OHLC price of thefinancial instrument, then the method 201 moves from block 211 to block109. At block 109, the provider gets G % of the purchase price and thebuyer gets back a portion of the purchase price (e.g., (100−C−G) %).From block 109 the method 201 proceeds to block 213 that is, forexample, the end of the method 201. On the other hand, if at block 211the method 201 determines that the forecasted OHLC price did not move ina good direction (e.g., moved in an undesirable or bad direction), thenthe method 201 moves from block 211 to block 92. At block 92 theprovider gets B % of the purchase price and the buyer gets back aportion of the purchase price (e.g., (100−C−B) %). From block 92 themethod 201 proceeds to block 213 that is, for example, the end of themethod 201.

FIG. 16 is a flowchart of a method 226 for determining the direction ofa forecasted OHLC price of a financial instrument. The method 226begins, for example, at block 230. The method 226 then proceeds to block232 and determines whether the predicted and actual OHLC prices moved inthe same direction with respect to some base price of the financialinstrument such as the closing price for yesterday or the opening pricefor today depending on when the prediction was made. If at block 232 themethod 226 determines that the forecasted and actual OHLC prices movedin the same direction relative to some base price of the financialinstrument, then the method 226 proceeds to block 234 and determinesthat the forecasted OHLC price moved in a good direction. From block 234the method 226 moves to block 238 that is, for example, the end of themethod 226. On the other hand, if at block 232 the method 226 determinesthat the forecasted and actual OHLC prices did not move in the samedirection (e.g., moved in opposite directions) relative to some baseprice of the financial instrument (such as the closing price foryesterday or the opening price for today depending on when theprediction was made), then the method 226 proceeds to block 236 anddetermines that the forecasted OHLC price moved in a bad direction.

Now described is the operation of the disclosed embodiments. Referringto FIG. 1, a website may operate on the server 12. One or more of theclients 1, 2, . . . , L of the plurality of clients 18, which may be adesktop computer or mobile device (e.g., a phone, a tablet, a laptop,etc) can browse the network 17, for example the internet, andcommunicate with the website hosted by server 12. In one embodiment, theserver 12 hosts a website that offers a prediction-based marketplace.The website hosted by the server 12 may be a regular browser version fordesktops and laptops, for example. In some embodiments, the websitehosted by the server 12 may be a mobile browser version for mobilecomputing devices such as, for example, smart phones. In yet otherembodiments, the server 12 hosts regular and mobile browser versions.Further, in some embodiments one or more of the clients 1, 2, . . . , Lof the plurality of clients 18 may use a browser to interact with theserver 12. In some embodiments, one or more of the clients 1, 2, . . . ,L of the plurality of clients 18 may use an application to interact withthe server 12.

In some embodiments, the prediction-based marketplace that is hosted byserver 12 may include a forecast of one or more events relating tofinancial instruments. In some instances, the one or more financialinstruments may be readily tradable. Further, in some instances, the oneor more financial instruments may include securities such as, forexample stocks or bonds. In yet additional scenarios, the one or morefinancial instruments may include mutual funds. Moreover, in otherexamples the one or more financial instruments may include indexes,exchange traded funds (ETFs), commodities, loans, deposits, futures, orcurrency derivatives, etc. In yet further instances, the one or morefinancial instruments may include other types of financial instruments.In alternative embodiments, the prediction-based marketplace that ishosted by server 12 may include a forecast of other types of events. Forexample, in one embodiment the prediction-based marketplace includesforecasts relating to sporting event outcomes. For sake of simplicity,the following examples may focus on embodiments where theprediction-based marketplace includes forecasts of events relating tofinancial instruments. However, it is understood that alternative typesof events may be forecasted and presented by the prediction-basedmarketplace that may be hosted by the server 12.

In operation, one or more of the clients 1, 2, . . . L of the pluralityof clients 18 browses the network 17, for example the internet, for theprediction-based marketplace that is hosted on the server 12. The server12 may retrieve from database 13 information, including data, related tothe prediction-based marketplace that is hosted on the server 12.Referring briefly to FIG. 2, in alternative embodiments, the server 12may communicate with an additional server, such as, server 24. Forexample, the server 12 may retrieve from server 24 information,including data, that may be related to the prediction-based marketplacethat is hosted on the server 12. For example, in one embodiment theprediction-based marketplace that is hosted on server 12 communicateswith the server 24 for retrieving pricing information of financialinstruments. For example, the server 12 may communicate with the server24 to retrieve the previous daily OHLC price of a financial instrument.(e.g., the OHLC price of a stock). In other embodiments, the server 12may communicate with the server 24 to retrieve some base price of afinancial instrument (e.g., the closing or opening price of a stock). Inother embodiments, the server 12 may communicate with the server 24 toretrieve other types of information, including data, that may be relatedto the prediction-based marketplace that is hosted on the server 12.

Still referring to FIG. 2, in some embodiments the server 24communicates with a database 26 to retrieve information, including data.For example, in operation the server 12 may communicate with the server24 to retrieve information (e.g. stock pricing) that may in turn beretrieved from the database 26.

In alternative embodiments, the prediction-based marketplace may beimplemented in a distributed system. In some embodiments, thedistributed system may be a cloud computing system. Referring now toFIG. 3, the prediction-based marketplace is hosted on a plurality ofservers 33. For example, in some embodiments there may be multipleinstances operating on the plurality of servers 33. In alternativeembodiments, an instance of the prediction-based marketplace may beperformed on one or more of the servers 1, 2, . . . , and N thatcomprise the plurality of servers 33. The plurality of clients 18 mayeach interact with the prediction-based marketplace that is hosted bythe one or more of the servers 1, 2, . . . , and N. Further, theplurality of servers may retrieve information, including data, fromdatabases 1, 2, . . . , and M that comprise the plurality of servers 35.For example, any one of the servers in the plurality of servers 33 maycommunicate with any one of the databases in the plurality of databases35 to retrieve information, including data, that may be related to theprediction-based marketplace.

For sake of simplicity, the following examples may focus on embodimentswhere the prediction-based marketplace is implemented in a system thatmost closely resembles the system of FIG. 1. However, it is understoodthat alternative the prediction-based marketplace described below may beimplemented in alternative systems including, for example, the systemsshown in FIGS. 2 and 3.

Now begins a discussion of the operation of the prediction-basedmarketplace that may be hosted on the server 12 (FIG. 1). Refer now toFIGS. 1 and 5. A user (e.g., a buyer or consumer) may use one or more ofthe clients 1, 2, . . . , L of the plurality of clients 18 to browse thenetwork 17, for example the internet, and interact with theprediction-based marketplace that is hosted on the server 12. Theprediction-based marketplace that is hosted on the server 12 may presentone or more forecasted outcomes, or predicted outcomes, of events forsale. For example, the server 12 may present for purchase to the user orbuyer that may be using one or more of the clients 1, 2, . . . , L, aforecast for an outcome of an event. (FIG. 4, block 42). In someembodiments, a forecasted outcome of an event is provided by an operatoror owner of the prediction-based marketplace (e.g., a market maker). Inother embodiments, the market maker may receive forecasts from thirdparty suppliers. For example, other users (e.g., predictors orsuppliers) of the prediction-based marketplace may provide theprediction-based marketplace with forecasts for event outcomes. In someembodiments, a third party may interact with the prediction-basedmarketplace in a similar manner as a user or buyer uses the one or moreclients 1, 2, . . . , L of the plurality of clients 18 and the server 12(FIG. 1). For example, a predictor of a forecast may use one or more ofthe clients 1, 2, . . . , L of the plurality of clients 18 such as acomputing device to communicate with the server 12. Further, the server12 may be configured to receive forecasts from a predictor. Moreover,the server 12 may be configured to manage an account of the predictorrelating to the consideration (e.g., money) that the predictor receivesfrom buyers of their forecasts. In yet additional embodiments, a user ofthe prediction-based marketplace may be a predictor (e.g., supplier ofpredictions) and a buyer (e.g., consumer of predictions). For example,the user may use one or more of the clients 1, 2, . . . , L of theplurality of clients 18 to communicate with the server 12 to providepredictions and purchase predictions.

Further, the server may be configured to facilitate the establishment ofa track record for predictors or providers of forecasts. For example, toestablish a track record for a financial instrument, a predictor maypublish free forecasts for the financial instrument for an arbitrarynumber of days, for example N number of days, that may be defined by theowner or operator of the prediction-based marketplace. Moreover, anyuser or buyer may buy forecasts for the financial instrument for thefirst N number of days at a without any charge. In this manner, theprediction-based marketplace may create a track record for a financialinstrument. In addition, the prediction-based marketplace may create atrack record for a given predictor of financial instruments.

Still referring to FIGS. 1 and 4, the server 12 is configured to allow auser to browse through the one or more predictions that are presented tothe user via one or more of the clients 1, 2, . . . , L of the pluralityof clients 18. The user may then select one or more predictions that theuser would like to purchase. For example, the user may purchase one ormore predictions using one or more of the clients 1, 2, . . . , L of theplurality of clients 18. For example, the server 12 may receive apurchase request from the buyer for one or more forecasts (FIG. 4, block44). In some instances, the buyer may provide payment at the time ofpurchase. In other instances, the buyer may request that a purchase bemade and payment may be handled at a different time. For example, thebuyer may have an account with the prediction-based marketplace.Further, the buyer may have an account with a minimum amount of depositson hand to purchase forecasts. Each time the buyer makes a purchaserequest for a forecast, the prediction-based marketplace that is hostedby server 12 may debit the buyer's account for the amount of thepurchase price. In yet other embodiments, the prediction-basedmarketplace that is hosted by server 12 may put a hold on the buyer'saccount for the amount of the purchase price. Then, for example, at alater time the market may settle the buyer's account and debit theappropriate amount, which may be the same amount as the purchase priceof the forecast, or a lesser amount, depending upon the actual outcomeof the event.

After the buyer purchases a forecast from the prediction-basedmarketplace, the server 12 credits a portion of the purchase price(e.g., C %) to the operator or owner of the prediction-based marketplace(e.g., market maker) and reserves the remaining amount of the purchaseprice (e.g., (100−C) %) for the buyer and predictor (e.g., at block 46).In some embodiments, the server 12 credits the purchase price (e.g., C%) to the market maker soon after the buyer purchases a forecast. Forexample, if the buyer makes a payment at the time of purchase, theserver 12 may transfer a portion of the purchase price (e.g., C %) overto the market maker. In other instances, the server 12 may create anaccounting record that credits the market maker with a portion of thepurchase price (e.g., C %) and debits the buyer's account so that theappropriate transactions can occur when payment is received by thebuyer. In another embodiment, the server 12 may transfer a portion ofthe purchase price (e.g., C %) from a financial account established bythe buyer over to the market maker. In alternative embodiments, themarket maker may receive a portion of the purchase price (e.g., C %) ina different manner.

The server 12 determines the outcome of the event for which the forecastwas purchased by the buyer (FIG. 4, block 48). In some embodiments, thisinformation may be determined by retrieving information from thedatabase 13. In other embodiments, this information may be retrievedelsewhere from databases or servers that may communicate with the server12. Then, after the server 12 knows the outcome of the event for whichthe forecast was purchase the server 12 may then determine the amountthat is due to the predictor of the event and the buyer of the event.For example, the server 12 may credit the amount of the remainingpurchase price (e.g., (100−C) %) that is due to the buyer and predictor,depending on the actual outcome of the event that was forecasted (FIG.4, block 50). In addition, for example, the predictor is rewarded forthe accurateness of its forecast. Moreover, for example, the buyer maybe credited a portion of the purchase price (e.g., “receive cash back”)when the forecast is inaccurate. Alternative embodiments described belowcan provide more details regarding the distribution of the purchaseprice between the buyer and predictor.

Still referring to FIG. 1 and now referring to FIG. 5, in anotherembodiment the server 12 may be configured to receive from a predictor aforecast for an outcome of an event (block 54). For example, the server12 may host a website that allows a predictor to provide one or moreforecasts for outcomes associated with one or more events. Thepredictor, may provide a forecast to the server 12 using one or more ofthe clients 1, 2, . . . , L of the plurality of clients 18 tocommunicate with the server 12. For example, the predictor may accessthe server 12 using a computing device such as a desktop or mobilecomputing device. Further, the predictor may access the server 12 viathe network 17. The predictor may also be a user or buyer of forecastedoutcomes. In other instances, the predictor may be associated with themarket maker, or owner or operator of the prediction-based marketplace.In other instances, the predictor may be a third party. For example, insome embodiments, the server 12 may be configured to receive one or moreforecasted outcomes of one or more events from a third party. In otherinstances, the server 12 may be configured to receive one or moreforecasted outcomes of one or more events from the market maker or owneror operator of the prediction-based marketplace. In some embodiments,the server 12 may be configured to receive an indication of one or morefiles that may include one or more forecasted outcomes of one or moreevents. In other embodiments, the server 12 may be configured tocommunicate with a database, for example database 13, for receiving froma predictor a forecast for an outcome of an event (block 54).

The server 12 may further be configured to store the forecast for theoutcome of the event that is received by the predictor. For example, theserver 12 may store the forecast in the database 13 (FIG. 1). Inalternative embodiments, the server 12 may store in the database 13 anindication of the storage location of the forecast. In alternativeembodiments, the server 12 may store the forecast received from thepredictor in the server 12. In further embodiments, the server 12 maystore the forecast received from the predictor in other components, suchas in database 26 (FIG. 2) and one or more databases in the plurality ofdatabases 35 (FIG. 3).

The server 12 may be further configured to determine the offer price ofthe forecast that is received from the predictor. (FIG. 5, block 58).For example, in some embodiments the server 12 determines the offerprice of the forecast that is received from the predictor based on adesire purchase price that is indicated by the predictor. In alternativeembodiments, the market maker (e.g., operator or owner of theprediction-based marketplace) may set the price of the forecast that isreceived from the predictor. In other instances, the price of theforecast may be based on historical data. For example, the price of theforecast may be based on the historical success of the predictorrelative to the accurateness of their forecasts. In other examples, theprice of the forecast may be based on the historical data relating tothe event that is forecasted. In alternative embodiments, the price ofthe forecast may be based on additional information.

Referring to FIG. 6, now provided is a description that provides greaterdetail in one embodiment that the prediction-based marketplace maydetermine the offer price of a forecast (FIG. 5, block 58). For example,the server 12 may be configured to determine objective informationrelated to the event that is being forecasted. For example, when theevent is related to a financial instrument the server 12 may beconfigured to get objective information related to the performance orstatistical analysis of the financial instrument. Further, the server 12may be configured to use the objective information related to the eventthat is being forecasted to determine the offer price of the forecast.In one embodiment, the server 12 may be configured to determine pricingof the forecast based on a maximum of, a minimum forecast price (e.g.,M) and another price that depends on the objective information relatedto the event (block 62). For example, the minimum forecast price (e.g.,M) may be a predetermined minimum purchase price that is defined by themarket maker, or owner or operator of the prediction-based marketplace.In other examples, the minimum forecast price (e.g., M) may be apredetermined minimum purchase price that is defined by the predictorthat is providing the forecast. For example, the predictor may want aminimum price for the forecast. In some instances the minimum forecastprice may be variable. Further, the minimum forecast price may bedefined in advance of the server 12 receiving a forecast. In otherinstances, the minimum forecast price may be defined contemporaneouslywith the server 12 receiving a forecast. In yet other instances, theminimum forecast price may be defined after the server 12 receives aforecast.

Referring to FIG. 7, now provided is a description that provides greaterdetail in one embodiment that the prediction-based marketplace maydetermine the offer price of a forecast (FIG. 5, block 58). For example,the server 12 may be configured to receive or get historical data forthe event that is being forecasted (block 66). For example, when theevent is related to a financial instrument the server 12 may beconfigured to get historical data relating to the performance of thefinancial instrument (e.g., previous OHLC prices). Further, the server12 may be configured to use the historical data for the event that isbeing forecasted to determine the offer price of the forecast. In oneembodiment, the server 12 may be configured to determine pricing of theforecast based on a maximum of, a minimum forecast price (e.g., M) andanother price that depends on the historical data related to the event.For example, the minimum forecast price (e.g., M) may be a predeterminedminimum purchase price that is defined by the market maker, or owner oroperator of the prediction-based marketplace. In other examples, theminimum forecast price (e.g., M) may be a predetermined minimum purchaseprice that is defined by the predictor that is providing the forecast.For example, the predictor may want a minimum price for the forecast. Insome instances the minimum forecast price may be variable. Further, theminimum forecast price may be defined in advance of the server 12receiving a forecast. In other instances, the minimum forecast price maybe defined contemporaneously with the server 12 receiving a forecast. Inyet other instances, the minimum forecast price may be defined after theserver 12 receives a forecast.

Now referring back to FIGS. 4 and 5 (block 48), at some point the server12 may be configured to determine the actual outcome of the event thatmay be forecasted. For example, in some embodiments the server 12 mayreceive the actual outcome of the event from the database 13. In otherembodiments the server 12 may be configured to receive the actualoutcome of the event from another database, such as the database 26 ofFIG. 2. For example, the server 12 may be configured to communicate withthe server 24 that may provide access to actual outcomes of events. Inone example, the server 24 may provide actual outcomes of financialinstruments, such as OHLC price of financial instruments. In someinstances, the OHLC prices of the financial instruments may be stored inthe database 26. Further, the server 12 may be configured to access theserver 24 that may retrieve the actual outcome of a forecasted eventfrom the database 26 and then communicate the actual outcome of thatevent to the server 12. In alternative embodiments, the server 12 mayreceive the actual outcome of the event from one or more databases thatmay be distributed.

Still referring to FIGS. 4 and 5, after the prediction-based marketplacedetermines the actual outcome of the forecasted event (e.g., at block48) the prediction-based marketplace (e.g., at block 50) may credit theamount of the remaining purchase price (e.g., (100−C) %) that is due tothe buyer and predictor, depending on the actual outcome. Recall, asdiscussed above, that the prediction-based marketplace may havepreviously credited a portion of the purchase price (e.g., C %) to themarket maker and may have reserves the remaining amount of the purchaseprice (e.g., (100−C) %) for the buyer and predictor. (e.g., at block46). In some instances, when the forecasted outcome of the event isclosely accurate to the actual outcome of the event, theprediction-based marketplace may distribute the remaining purchase price(e.g., (100−C) %) to the predictor as a reward for accuracy. In someinstances, when the forecasted outcome of the event is closely accurateto the actual outcome of the event, but not precisely the same, theprediction-based marketplace may distribute the remaining purchase price(e.g., (100−C) %) to both the predictor and the buyer of the forecast.For example, the predictor may receive a majority of the remainingpurchase price while the buyer may receive a portion of the purchaseprice back (e.g., “cash back”). In other instances, when the differencebetween the forecasted and actual event outcomes exceeds a threshold,the predictor may receive a minority of the remaining purchase pricewhile the buyer may receive a majority portion of the purchase priceback (e.g., “cash back”). In alternative embodiments, the remainingportion of the purchase price (e.g., (100−C) %) may be distributed amongthe predictor and buyer in a manner that is different than describedabove. In addition, in one embodiment, the server 12 may be configuredto credit the amount of the remaining purchase price (e.g., (100−C) %)that is due to the buyer and predictor, depending on the actual outcome.In alternative embodiments, such as embodiments that may be implementedin the system shown in FIG. 3, the plurality of servers may beconfigured 33 may be configured to credit the amount of the remainingpurchase price (e.g., (100−C) %) that is due to the buyer and predictor,depending on the actual outcome.

Referring now to FIG. 8, now described in greater detail is anembodiment for crediting the amount of the remaining purchase price(e.g., (100−C) %) that is due to the buyer and predictor, depending onthe actual outcome (FIGS. 4 and 5, block 50). For example, theprediction-based marketplace may determine whether the forecastedoutcome is within a defined range (e.g., ±P %) of the actual outcome(block 84). Generally, the predictor's goal may be to forecast theoutcome of an event within a range of P % (e.g., ±P %) of the actualoutcome of the event. The range P % may be pre-defined or variable, andmay be determined by the owner or operator of the prediction-basedmarketplace (e.g., the market maker). In other embodiments, P % may bedetermined by the predictor or buyer, or collectively by one or more ofthe market-maker, predictor, or buyer. In further embodiments, thedefined range P % may be determined by additional information or bydifferent third parties.

Further, the server 12 may be configured to determine whether theforecasted outcome is within a defined range (e.g., ±P %) of the actualoutcome (block 84). For example, if the server 12, or more generally,the prediction-based marketplace determines that the forecasted outcomeis within a defined range (e.g., ±P %) of the actual outcome, then inone embodiment the predictor receives the remaining balance of thepurchase price (e.g., (100−C) %) and the buyer gets back nothing (block86). On the other hand, if the server 12, or more generally, theprediction-based marketplace determined that the forecasted outcome isoutside a defined range (e.g., ±P %) of the actual outcome, then in oneembodiment predictor gets B % of the purchase price and the buyer getsback a portion of the purchase price (e.g., (100−C−B) %) (block 92). Forexample, in that scenario the buyer may get some cash back.

Now referring to FIG. 9, described in greater detail is an alternativeembodiment for crediting the amount of the remaining purchase price(e.g., (100−C) %) that is due to the buyer and predictor, depending onthe actual outcome (FIGS. 4 and 5, block 50). This embodiment is similarin some respects to the embodiment previously discussed, yet differentin other respects. For sake of simplicity, the discussion below focuseson the differences. For example, the server 12 may determine whether theforecasted outcome falls within a defined range (e.g., ±P %) of theactual outcome (block 84). Generally, the predictor's goal may be toforecast the outcome of an event within a range of P % (e.g., ±P %) ofthe actual outcome of the event. If the server 12 determines that theforecasted outcome is outside a defined range (e.g., ±P %) of the actualoutcome of the forecasted event, then the server 12 determines whetherthe forecasted outcome was in a good direction (block 107). For example,a forecasted outcome may be in a good direction when the forecastpredicts an outcome that moves in the same direction as the actualoutcome, relative to a starting or beginning position. For example, aforecasted OHLC price of a financial instrument may be in a gooddirection when it and the actual OHLC price of the financial instrumentmove in the same direction relative to some base price of the financialinstrument such as the closing price for yesterday or the opening pricefor today depending on when the prediction was made. If the server 12determines that the forecasted outcome moved in a good direction, theprediction-based marketplace may distribute the remaining purchase price(e.g., (100−C) %) so that the predictor gets G % of the purchase priceand the buyer gets back a portion of the purchase price (e.g., (100−C−G)%) (block 109). For example, the server 12 may be configured to providea portion (e.g., G %) of the remaining purchase price (e.g., (100−C) %)to the predictor and another portion (e.g., (100−C−G) %) as cash back tothe predictor.

The value G may be a defined percentage of the purchase price (e.g., G%) and may be determined, for example, by the market maker. Inalternative embodiments, the defined percentage of the purchase price(e.g., G %) may be determined by a consumer or buyer of the forecast. Inyet another embodiment, the defined percentage of the purchase price(e.g., G %) may be determined by a predictor of the forecast. In furtherembodiments, the defined percentage of the purchase price (e.g., G %)may be determined by a combination of the market maker, the consumer orbuyer, and the predictor. In some embodiments, the defined percentage ofthe purchase price (e.g., G %) may be determined in other ways.

On the other hand, if the server 12 determines that the forecastedoutcome moved in an undesirable or bad direction (e.g., a directionopposite a good direction), the prediction-based marketplace maydistribute the remaining purchase price (e.g., (100−C) %) so that thepredictor gets B′% of the purchase price and the buyer gets back aportion of the purchase price (e.g., (100−C−B′) %) (block 111). Forexample, the server 12 may be configured to provide a portion (e.g.,B′%) of the remaining purchase price (e.g., (100−C) %) to the predictorand another portion (e.g., (100−C−B′) %) as cash back to the buyer.

The value B′ may be a defined percentage of the purchase price (e.g.,B′%) and may be determined, for example, by the market maker. Inalternative embodiments, the defined percentage of the purchase price(e.g., B′%) may be determined by a consumer or buyer of the forecast. Inyet another embodiment, the defined percentage of the purchase price(e.g., B′%) may be determined by a predictor of the forecast. In furtherembodiments, the defined percentage of the purchase price (e.g., B′%)may be determined by a combination of the market maker, the consumer orbuyer, and the predictor. In some embodiments, the defined percentage ofthe purchase price (e.g., B′%) may be determined in other ways.

Now referring to FIG. 10, described in more detail is the operation ofanother embodiment of a prediction-based marketplace. Still referring toFIG. 1, for example, the server 12 may be configured to facilitate theimplementation of prediction-based marketplace. For example, the server12 may host a website that may allow sellers of predictions to interactwith the website and provide predictions for outcomes of events.Moreover, the server 12 may host a website that is configured to receivea prediction for an outcome of an event from a seller (block 135). Forexample, a seller of a prediction may use a computing device that may beon or more of the clients 1, 2, . . . , L of the plurality of clients 18to interact with the server 12 via the network 17, for example theinternet. In this manner, the seller of the prediction may provide tothe server 12 a prediction for an outcome of an event. Further, in turn,the sever 12 may receive the prediction for the outcome of the eventfrom the seller of the prediction. The server may then determine a priceto offer the prediction for sale to a buyer that may be interested inpurchasing the prediction (block 137). Ad described above, theprediction-based marketplace may determine the price to offer theprediction for sale in a number of different ways.

The server 12 may then provide for sale the prediction to the buyer(block 139). For example, the website that is hosted by the server 12may present a list of predictions that are available for purchase. Thebuyer may use a computing device such as one or more of the clients 1,2, . . . , L of the plurality of clients 18 to browse a listing of thepredictions. Moreover, the buyer may provide an indication to purchaseone or more of the predictions that may be presented by the website thatis hosted by the server 12. Further, the server 12 may then receive anindication by the buyer to purchase the prediction (block 141). In someembodiments, the indication by the buyer may include payment forpurchase of the prediction. In other embodiments, the indication by thebuyer may include an authorization that the buyer may be charged for thepurchase of the prediction. In additional embodiments, the indication bythe buyer may include an authorization that the prediction-basedmarketplace may debit the purchase price of the prediction from anaccount that is maintained by the prediction-based marketplace for thebuyer.

In addition, the server 12 may be configured to process a payment fromthe buyer (block 143). For example, the server 12 may be configured toprocess a payment from the buyer for the purchase of the prediction forwhich the buyer provided an indication to purchase the prediction. Forexample, when payment for the purchase may be received contemporaneouslyor subsequently to receiving the indication of the buyer for purchase ofthe prediction, the server 12 may process the payment when the paymentis received. For example, the server 12 may be configured to receivepayment by a variety of payment methods including credit card, debitcard, and bank account transfers. Further, the server 12 may beconfigured to receive payment by additional methods.

Still referring to FIG. 10, the server 12 may further be operable toprocess a payment from the buyer (block 143). As discussed above, theplurality of servers may process payment from the buyer in numerousways. For sake of brevity, only some examples are now presented. Forexample, the prediction-based marketplace may debit an account that itmaintains for the buyer, may process a transaction for payment with thebuyer's credit or debit card, or may process payment by bank transfer.In alternative embodiments, the server 12 may be operable to process apayment from the buyer in another way.

Further, the server 12 may be operable to determine the actual outcomeof the event that is predicted (block 145). In some embodiments, theserver 12 may retrieve the actual outcome of the event that is predictedfrom the database 13. In alternative embodiments, the server 12 mayretrieve the actual outcome of the event from another server or databasethat may be connected to the network 17. Referring briefly to FIG. 2, inyet another embodiment the server 12 may be retrieve the actual outcomeof the event that is predicted from the server 24. In one scenario, theserver 12 may request the actual outcome of the predicted event from theserver 24 by initiating a request over the network 17. In someembodiments, the server 24 may retrieve the actual outcome of thepredicted event from the database 26.

Now referring back to FIG. 1, and still referring to FIG. 10, the server12 may be operable to compare the actual and predicted outcomes of theevent (block 147). For example, the server 12 may compare how close oraccurate the predicted outcome was to the actual outcome. In someembodiments, the comparison be used to distribute the purchase price ofthe prediction across one or more market participants that may include,for example, the market maker, buyer (e.g., consumer), and the seller(e.g., predictor, forecaster, or provider of the prediction).

In addition, the server 12 may distribute the payment among the marketmaker, buyer, and seller based on the comparison of the actual andpredicted outcomes (block 149). In some embodiments, the server 12 maydistribute a fixed amount or percentage of the purchase price to themarket maker for providing a prediction-based marketplace where buyersand sellers can transact predictions for outcomes of events. Inalternative embodiments, the server 12 may distribute a variable amountof the purchase price to the market maker in exchange for providing aprediction-based marketplace. For example, the variable amount maydepend on the accurateness of the predictions that are transacted. Inthis scenario, a market maker's share of the purchase price may beproportional to the accurateness of the prediction that is transacted.In other embodiments, the amount distributed to the market maker maydepend on other factors or variables.

Further, the server 12 may distribute the remaining balance of thepurchase price (e.g., the purchase price less the market maker'sportion) among the predictor (e.g., seller) and the buyer of theprediction, based on the comparison of the actual and predictedoutcomes. Generally, the server 12 may reward the seller for goodpredictions by providing the predictor with the majority, or in someinstances the entirety, of the remaining balance of the purchase price.On the other hand, the server 12 may provide a cash back feature to thebuyer for predictions that may not be as accurate as desired. In thisscenario, the remaining balance may be distributed among the predictorand buyer in a manner such that the buyer receives a portion of theremaining balance as a cash back feature for purchasing a predictionthat is not as accurate as desired while the predictor receives aportion of the remaining balance than is less than the entirety of theremaining balance.

Referring to FIGS. 1 and 11, now described in greater detail is anembodiment of the distribution of the purchase price among the marketmaker, buyer, and predictor. For example, the server 12 may credit aportion of the purchase price (e.g., C %) to the market maker andreserve the remaining amount of the purchase price (e.g., (100−C) %) forthe buyer and seller (block 160). In an embodiment, the value C may be adefined amount that is determined by the market maker, or owner oroperator of the prediction-based marketplace. In other embodiments, thevalue C may be defined by one or more of the market participants thatmay include, for example, the market maker, a buyer, and a seller. Theserver 12 may then determine whether the forecasted outcome falls withina defined range (e.g., ±P %) of the actual outcome (block 84). If theserver 12 determines that the forecasted outcome falls within thedefined range (e.g., ±P %) of the actual outcome, then the server 12 maydistribute the remaining balance of the purchase price (e.g., (100−C) %)among the buyer and seller (block 86) in a manner so that the sellerreceives the remaining balance and the buyer receives nothing. On theother hand, if the server 12 determines that the forecasted outcomefalls outside the defined range (e.g., ±P %) of the actual outcome, thenthe server 12 may distribute the remaining balance of the purchase price(e.g., (100−C) %) among the buyer and seller (block 92) in a manner sothat the seller receives B % of the purchase price and the buyerreceives back a portion of the purchase price (e.g., (100−C−B) %). Theserver 12 may provide a portion of the purchase price back to the buyeras a credit or cash back feature of the prediction-based marketplace.

Referring to FIGS. 1 and 12, now described in greater detail is analternative embodiment of the distribution of the purchase price amongthe market maker, buyer, and predictor. In some respects, the followingembodiment is similar to the embodiment just described while referringto FIG. 11. Therefore, for sake of clarity, this discussion focuses onthe differences. Generally, the seller's goal may be to forecast theoutcome of an event within a range of P % (e.g., ±P %) of the actualoutcome of the event. The server 12 may take an alternative course ofaction when determining that the forecasted outcome falls outside adefined range (e.g., ±P %) of the actual outcome (block 84). Forexample, the server 12 may determine whether the forecasted outcome maybe in a good direction (block 107). If the server 12 determines that theforecasted outcome is in a good direction, then the server 12 maydistribute the remaining balance of the purchase price (e.g., (100−C−G)%) among the seller and buyer so that the seller gets G % of thepurchase price and the buyer gets back a portion of the purchase price(e.g., (100−C−G) %). On the other hand, if the server 12 determines thatthe forecasted outcome is not in a good (e.g., is in an undesirable orbad direction), then the server 12 may distribute the remaining balanceof the purchase price (e.g., (100−C−G) %) among the seller and buyer sothat the seller gets B′% of the purchase price and the buyer gets back aportion of the purchase price (e.g., (100−C−B′) %) (block 111).

The examples described above may refer at times to the system shown inFIG. 1. However, it is understood that alternative embodiments of themethods disclosed herein may be implemented in the systems shown inFIGS. 2 and 3, as well as additional systems. Further, the discloseddiscussion of embodiments is not limited to a particular type of system.To illustrate this, provided now is a description of an embodiment of aprediction-based marketplace for a financial instrument that may beimplemented in a distributed, or cloud computing, system architecture asshown in FIG. 3.

The plurality of servers 33 may host a website that may be used by theprediction-based marketplace to interact with suppliers or sellers(e.g., predictors) and consumers (e.g., buyers) of predictions orforecasts for outcomes of events. For example, the plurality of servers33 may operate different instances of the website. Moreover, the websitefor the prediction-based marketplace may be distributed amount theplurality of servers 33. Referring now to FIG. 13, in one embodiment ofa prediction-based marketplace for predictions of financial instruments,the plurality of servers 33 may receive a forecasted OHLC price of afinancial instrument (block 180). In some instances, the forecasted OHLCprice of the financial instrument may be provided by the owner oroperator (e.g., market maker) of the prediction-based marketplace. Inother instances, the forecasted OHLC price of the financial instrumentmay be provided by a third party seller of predictions, such as anindividual or a company that may provide forecasted OHLC prices offinancial instruments. For example, a third party seller of predictionsmay interact with the prediction-based marketplace through one or moreof the clients 1, 2, . . . , L of the plurality of clients 18. That oneor more of the clients 1, 2, . . . , L may communicate with the securenetwork 31 and the plurality of servers 33 via the network 17, that mayinclude, for example, the internet. In additional instances, theforecasted OHLC price of the financial instrument may be provided by themarket maker and a third party.

The plurality of servers 33 may determine a price to offer theforecasted OHLC price of the financial instrument (block 182). Forexample, briefly referring to FIG. 14, in one embodiment, the pluralityof server 33 determines historical data for the financial instrument(block 198). For example, the plurality of servers 33 may retrieve theopening price for the financial instrument that may be the historicaldata for the financial instrument. Moreover, the plurality of severs 33may retrieve the previous day's closing price for the financialinstrument that may be the historical data for the financial instrument.In addition, the plurality of servers 33 may retrieve the opening orclosing price for the financial instrument over another period of timethat may be the historical data for the financial instrument. In oneembodiment, the plurality of servers 33 may retrieve historicalinformation relating to the financial instrument from the plurality ofdatabases 35. In other embodiments, the plurality of servers 33 mayretrieve historical information relating to the financial instrumentfrom other components, such as other servers or databases that may be incommunication with the secure network 31, such as via the network 17,that may include, for example, the internet.

After the prediction-based marketplace has retrieved the historical datafor the financial information, the plurality of servers 33 determinespricing of the financial forecast based on a maximum of, a minimumforecast price (e.g., M) and another price that depends on thehistorical data related to the event (e.g., 0.1% of closing or openingprice) (block 200). For example, the minimum forecast price (e.g., M)may be a minimum amount that may depend, for example, on the countrywhere the financial instrument is traded or located. For example, if thefinancial instrument is traded or located in the United States, M may beone US Dollar. Or, for example, if the financial instrument is traded orlocated in India, M could be ten Indian Rupees. The value M mayrepresent the minimum amount that a buyer or consumer may pay for thepurchase of a forecast for the OHLC price of financial. Theprediction-based marketplace may take the maximum of the minimumforecast price M and another price (e.g., historical-based pricing) thatdepends on the historical data related the financial instrument. Forexample, the plurality of servers 33 may be configured to determine thehistorical-based pricing to be a number of basis points (e.g., 10 basispoints or 0.1%) of the financial instrument's closing price for theprevious day or the opening price for the same day for which the OHLCprice of that financial instrument is forecasted. The prediction-basedmarketplace may then take the maximum or greater amount of thishistorical-based pricing and the minimum forecast price M, to determinethe pricing of the forecasted OHLC price of the financial instrument. Inthis manner, the prediction-based marketplace may guarantee that aminimum forecast price M may be determined regardless of what thehistorical-based pricing may be.

In alternative embodiments, pricing may be based on other objectiveinformation related to the financial instrument. For example, pricingmay be based on the historical volatility of the financial instrumentover a period of time. In other instances, pricing may be based onaverage or statistical OHLC prices of the financial instrument. In yetother embodiments, pricing may be based on the volume of trading forthat financial instrument. Further, there may be addition objectiveinformation and historical information that may be used in determiningpricing. In yet other embodiments, the prediction-based marketplace maydetermine pricing based on the minimum forecast price and may notdetermine pricing based on the objective-based or historical-basedpricing. In other instances, the prediction-based marketplace maydetermine pricing based on the objective-based or historical-basedpricing and may not determine pricing based on the minimum forecastprice.

Referring back to FIGS. 13 and 15, the plurality of servers 33 mayprovide for sale to a buyer the forecasted OHLC price of the financialinstrument (block 182) after the pricing is determined (block 184). Forexample, the plurality of servers 33 may host a website that provides alisting or presentation of financial instruments for which forecastedOHLC prices may be purchased. In one embodiment, a buyer or consumer maybrowse the website to review the listing or presentation. Further, in anembodiment the buyer may not see the forecasted OHLC prices until thebuyer agrees to purchase the forecasted OHLC price. For example, thebuyer may provide an indication to purchase the forecasted OHLC price ofa financial instrument that is presented by the website. The pluralityof servers 33 may receive the indication by the buyer to purchase theforecasted OHLC price of the financial instrument (block 186). Asdiscussed above, a buyer's indication to purchase a forecast may or maynot include or be accompanied by a payment. For example, in someinstances the indication includes authorization to debit an account thatis maintained by the prediction-based marketplace. In other embodiments,the indication may be included or may be accompanied by a payment (e.g.,credit card payment, bank transfer, etc.) that may be processed by theprediction-based marketplace. In yet another embodiment, the indicationmay include an agreement, promise, or acceptance by the buyer that itmay be obligated to pay the purchase price for the forecasted OHLC priceat a later time. Further, the agreement, promise, or acceptance by thebuyer may include an obligation to pay a portion of the purchase pricethat may be determined after the actual OHLC price of the financialinstrument is known, and when the buyer may receive a portion of thepurchase price back as cash back.

The plurality of servers 33 may then process a payment from the buyer topurchase the forecasted OHLC price of the financial instrument. Asdiscussed above, the plurality of servers 33 may process payment fromthe buyer in numerous ways. For sake of brevity, only some examples arenow presented. For example, the prediction-based marketplace may debitan account that it maintains for the buyer, may process a transactionfor payment with the buyer's credit or debit card, or may processpayment by bank transfer.

The plurality of servers 33 may then determine the actual OHLC price ofthe financial instrument (block 190). For example, in some embodimentsthe plurality of servers 33 may receive the actual OHLC price of thefinancial instrument from the plurality of databases 35. In otherembodiments, the plurality of servers 33 may communicate with one ormore other servers or databases to retrieve the actual OHLC prices offinancial instruments. Further, the plurality of servers 33 may comparethe actual and forecasted OHLC prices of the financial instrument (block192). The comparison between the actual and forecasted OHLC prices ofthe financial instrument may be used to generate a rating for thepredictor or provider of the respective forecasts. Further, thecomparison between the actual and forecasted OHLC prices of thefinancial instrument may be used to determine how the purchase price ofa forecasted OHLC price may be distributed among the market maker,buyer, and seller of the forecasted OHLC price.

For example, the plurality of servers 33 may distribute the paymentamong the market maker, buyer, and seller based on the comparison of theactual and forecasted OHLC prices of the financial instrument (block194). Now refer to FIG. 15 for a more detailed discussion regardingdistribution of the purchase price to the prediction-based marketparticipants. The plurality of servers 33 may provide a portion of thepurchase price (e.g., C %) to the market maker and the remaining amountof the purchase price (e.g., 100−C) % may be reserved for the buyer andthe provider of the predicted OHLC price of the financial instrument(block 207). In alternative embodiments, the prediction-basedmarketplace may credit a portion of the purchase price to the marketmaker until payment from the buyer is received. In alternativeembodiments, the prediction-based marketplace may provide a portion ofthe purchase price to the market maker earlier in time. For example, themarket maker's portion of the purchase price may be distributed orcredited upon or after receiving the indication by the buyer to purchasethe forecasted OHLC price of the financial instrument. In otherembodiments, the market maker's portion of the purchase price may dependon variables, including for example, but not limited to, the rating ofthe predictor or provider, the forecasted OHLC price, the actual OHLCprice, etc.

In an embodiment, the market maker receives a defined portion (e.g., C%) of each transaction (e.g., purchases of forecasted OHLC prices offinancial instruments). The value C may be defined by the market maker,or owner or operator of the prediction-based marketplace. Further, thevalue C may vary as desired. Moreover, the value C may vary fordifferent financial instruments.

The plurality of servers 33 may determine whether the forecasted OHLCprice is within a defined range (e.g., ±P %) of the actual OHLC price(block 209). Generally, the provider's goal may be to forecast the OHLCprice of a financial instrument within a range of P % (e.g., ±P %) ofthe actual OHLC price of the financial instrument. As previouslydiscussed, the value P may vary. Further, the value P may be defined byany one or a combination of the market maker, buyer, and seller (e.g.,provider) of a financial instrument. Moreover, the value P may vary fordifferent financial instruments. If the plurality of servers 33determines that the forecasted OHLC price fell within a defined range(e.g., ±P %) of the actual OHLC price, then the plurality of servers 33may determine that the provider receives the remaining balance of thepurchase price (e.g., (100−C) %) and the buyer receives nothing. Inother words, the prediction-based marketplace may determine that theforecasted OHLC price was a good forecast, and was valuable to the buyerand thus provides the provider (e.g., seller) of the forecast the entireremaining amount of the purchase price after the market maker's take ofC % of the purchase price.

On the other hand, if the plurality of servers 33 determines that theforecasted OHLC price is outside a defined range (e.g., ±P %) of theactual OHLC price, then the plurality of servers 33 may determine thatthe buyer receives back a portion of the purchase price. In other words,the prediction-based marketplace may determine that the forecasted OHLCprice was not as good a forecast as desired, and thus may provide aportion of the purchase price back to the buyer. For example, this maybe described as a cash back feature of the prediction-based marketplace.The plurality of servers 33 may determine the portion of the purchaseprice to credit back to the buyer (e.g., amount of cash back), byevaluating the direction of the forecasted and actual OHLC pricesrelative to some base price of the financial instrument that wasforecasted (such as the closing price for yesterday or the opening pricefor today depending on when the prediction was made). For example, inone embodiment, the plurality of servers 33 determines whether theforecasted OHLC price moved in a good direction. If the plurality ofservers 33 determines that the forecasted OHLC price moved in a gooddirection, then the prediction-based marketplace may distribute thepurchase price in a manner so that the provider gets G % of the purchaseprice and the buyer gets back a portion of the purchase price (e.g.,(100−C−G) %) (block 109). In other words, the buyer may get a credit orcash back that is valued at, for example, (100−C−G) % of the purchaseprice of the forecasted OHLC price of the financial instrument, whilethe market maker and predictor respectively receive, for example, C %and G % of the purchase price.

The value G may be a defined percentage of the purchase price (e.g., G%) and may be determined, for example, by the market maker. Inalternative embodiments, the defined percentage of the purchase price(e.g., G %) may be determined by a consumer or buyer of the forecast. Inyet another embodiment, the defined percentage of the purchase price(e.g., G %) may be determined by a predictor of the forecast. In furtherembodiments, the defined percentage of the purchase price (e.g., G %)may be determined by a combination of the market maker, the consumer orbuyer, and the predictor. In some embodiments, the defined percentage ofthe purchase price (e.g., G %) may be determined in other ways.

On the other hand, if the plurality of servers 33 determines that theforecasted OHLC price moved in an undesirable or bad direction, then theprediction-based marketplace may distribute the purchase price in amanner so that the provider gets B % of the purchase price and the buyergets back a portion of the purchase price (e.g., (100−C−B) %) (block92). In other words, the buyer may get a credit or cash back that isvalued at, for example, (100−C−B) % of the purchase price of theforecasted OHLC price of the financial instrument, while the marketmaker and predictor respectively receive, for example, C % and B % ofthe purchase price.

The value B may be a defined percentage of the purchase price (e.g., B%) and may be determined, for example, by the market maker. Inalternative embodiments, the defined percentage of the purchase price(e.g., B %) may be determined by a consumer or buyer of the forecast. Inyet another embodiment, the defined percentage of the purchase price(e.g., B %) may be determined by a predictor of the forecast. In furtherembodiments, the defined percentage of the purchase price (e.g., B %)may be determined by a combination of the market maker, the consumer orbuyer, and the predictor. In some embodiments, the defined percentage ofthe purchase price (e.g., B %) may be determined in other ways.

The prediction-based marketplace may determine the direction of aforecasted OHLC price of a financial instrument in different ways. Forexample, refer now to FIGS. 3 and 16 for a more detailed description ofan embodiment for determining the direction of a forecasted OHLC priceof a financial instrument. The plurality of servers 33 may determinewhether the forecasted and actual OHLC prices moved in the samedirection with respect to some base price of the financial instrument(block 232). For example, if the actual OHLC price of the financialinstrument increases relative to the closing or opening price of thefinancial instrument and the forecasted OHLC price is greater than theclosing or opening price, then the plurality of servers 33 may determinethat the forecasted OHLC price moved in a good direction with respect tothe closing or opening price of the financial instrument (block 234). Onthe other hand, if the actual OHLC price of the financial instrumentincreases relative to the closing or opening price of the financialinstrument and the forecasted OHLC price is less than the closing oropening price, then the plurality of servers 33 may determine that theforecasted OHLC price moved in an undesirable or bad direction withrespect to the opening price of the financial instrument (block 236).

Similarly, if the actual OHLC price of the financial instrumentdecreases relative to the closing or opening price of the financialinstrument and the forecasted OHLC price is less than the closing oropening price, then the plurality of servers 33 may determine that theforecasted OHLC price moved in a good direction with respect to theclosing or opening price of the financial instrument (block 234). On theother hand, if the actual OHLC price of the financial instrumentdecreases relative to the closing or opening price of the financialinstrument and the forecasted OHLC price is greater than the closing oropening price, then the plurality of servers 33 may determine that theforecasted OHLC price moved in an undesirable or bad direction withrespect to the opening price of the financial instrument (block 236).

The systems shown in FIGS. 1-3 and components described above may beimplemented in hardware, software, and/or a combination thereof.Further, each system or component in the systems of FIGS. 1-3 may beimplemented by a plurality of computing devices (e.g., desktops,servers, workstations, etc.) or by a single computer. Further, themethods of FIGS. 4-16 described above may also be performed by aplurality of computing devices or a single computer. For example, theportions of the methods may be distributed across a plurality ofcomponents throughout a system that may implement the method. Thecomponents of the systems may be co-located or remotely located from oneanother.

Although embodiments of the present disclosure have been described indetail, those skilled in the art should understand that they may makevarious changes, substitutions, alterations, and alternatives hereinwithout departing from the spirit and scope of the present disclosure.Accordingly, such changes, substitutions, alterations, and alternativesare intended to be included within the scope of the present disclosureas defined in the following claims.

What is claimed is:
 1. A system comprising: one or more processing unitsoperable to: receive a prediction for an outcome of an event from aseller; determine a price to offer the prediction for sale to the buyer;provide the prediction to a buyer; receive an indication by the buyer topurchase the prediction; process a payment from the buyer to purchasethe prediction; determine the actual outcome of the event that ispredicted; compare the actual and predicted outcomes of the event; anddistribute the payment in a manner so that the buyer and seller eachreceive a portion of the payment based on the comparison of the actualand predicted outcomes.
 2. The system of claim 1, wherein the one ormore processing units is operable to determine the price to offer theprediction for sale to the buyer based on historical data related to theevent.
 3. The system of claim 2, wherein the one or more processingunits is operable to determine the price to offer the prediction forsale to the buyer based on the maximum of, a minimum price and anotherprice that depends on the historical data related to the event.
 4. Thesystem of claim 3, wherein the event is related to the value of afinancial instrument, wherein the historical data includes a percentageof one of the opening and the closing price of the financial instrument,and wherein the minimum price is predetermined by a market maker.
 5. Thesystem of claim 4, wherein the one or more processing units is operableto distribute the payment in a manner so that the buyer receives a firstportion of the payment and the seller receives a second portion of thepayment, in response to movement in a good direction, and the buyerreceives a third portion of the payment and the seller receives a fourthportion of the payment, in response to movement in a bad direction,wherein the first portion is less than the third portion and the secondportion is less than the fourth portion.
 6. The system of claim 1,wherein the one or more processing units is operable to distribute thepayment in a manner so that the buyer receives a first portion of thepayment and the seller receives a second portion of the payment, inresponse to the difference of the actual and predicted outcomes fallingoutside of a first range.
 7. The system of claim 6 wherein the one ormore processing units is operable to distribute the payment in a mannerso that the buyer receives a third portion of the payment and the sellerreceives a fourth portion of the payment, in response to the differenceof the actual and predicted outcomes falling within the first range andoutside of a second range, wherein the first range is greater than thesecond range, wherein the third portion is less than the first portion,and wherein the fourth portion is less than the second portion.
 8. Thesystem of claim 1, wherein the one or more processing units is operableto distribute the payment in a manner so that the buyer receives a firstportion of the payment, the seller receives a second portion of thepayment, a market maker receives a third portion of the payment, andwherein the sum of the first, second, and third portions equals theamount of the payment from the buyer.
 9. A method comprising: receivinga prediction for an outcome of an event from a seller; determining aprice to offer the prediction for sale to the buyer; providing theprediction to a buyer; receiving an indication by the buyer to purchasethe prediction; processing a payment from the buyer to purchase theprediction; determining the actual outcome of the event that ispredicted; comparing the actual and predicted outcomes of the event; anddistributing the payment in a manner so that the buyer and seller eachreceive a portion of the payment based on the comparison of the actualand predicted outcomes.
 10. The method of claim 9, wherein thedetermining the price to offer the prediction for sale to the buyerincludes determining the price to offer the prediction for sale to thebuyer based on historical data related to the event.
 11. The method ofclaim 10, wherein determining the price to offer the prediction for saleto the buyer based on historical data related to the event includesdetermining the price to offer the prediction for sale to the buyerbased on the maximum of, a minimum price and another price that dependson the historical data related to the event.
 12. The method of claim 11,wherein the event is related to the value of a financial instrument,wherein the historical data includes a percentage of one of the openingand the closing price of the financial instrument, and wherein theminimum price is predetermined by a market maker.
 13. The method ofclaim 12, wherein the distributing the payment includes distributing thepayment in a manner so that the buyer receives a first portion of thepayment and the seller receives a second portion of the payment, inresponse to movement in a good direction, and the buyer receives a thirdportion of the payment and the seller receives a fourth portion of thepayment, in response to movement in a bad direction, and wherein thefirst portion is less than the third portion and the second portion isless than the fourth portion.
 14. The method of claim 9, wherein thedistributing the payment includes distributing the payment in a mannerso that the buyer receives a first portion of the payment and the sellerreceives a second portion of the payment, in response to the differenceof the actual and predicted outcomes falling outside of a first range.15. The method of claim 14, wherein the distributing the paymentincludes distributing the payment in a manner so that the buyer receivesa third portion of the payment and the seller receives a fourth portionof the payment, in response to the difference of the actual andpredicted outcomes falling within the first range and outside of asecond range, wherein the first range is greater than the second range,wherein the third portion is less than the first portion, and whereinthe fourth portion is less than the second portion.
 16. An apparatuscomprising: one or more computer-readable storage structures for storinga plurality of computer instructions executable by a processor, theplurality of computer instructions including: instructions for receivinga prediction for an outcome of an event from a seller; instructions fordetermining a price to offer the prediction for sale to the buyer;instructions for providing the prediction to a buyer; instructions forreceiving an indication by the buyer to purchase the prediction;instructions for processing a payment from the buyer to purchase theprediction; instructions for determining the actual outcome of the eventthat is predicted; instructions for comparing the actual and predictedoutcomes of the event; and instructions for distributing the payment ina manner so that the buyer and seller each receive a portion of thepayment based on the comparison of the actual and predicted outcomes.17. The apparatus of claim 16, wherein the instructions for determiningthe price to offer the prediction for sale to the buyer includesinstructions for determining the price to offer the prediction for saleto the buyer based on historical data related to the event.
 18. Theapparatus of claim 17, wherein the instructions for determining theprice to offer the prediction for sale to the buyer includesinstructions for determining the price to offer the prediction for saleto the buyer based on the maximum of, a minimum price and another pricethat depends on the historical data related to the event.
 19. Theapparatus of claim 17, wherein the event is related to the value of afinancial instrument, wherein the historical data includes a percentageof one of the opening and the closing price of the financial instrument,wherein the minimum price is predetermined by a market maker, andwherein the instructions for distributing the payment includesinstructions for distributing the payment in a manner so that the buyerreceives a first portion of the payment and the seller receives a secondportion of the payment, in response to movement in a good direction, andso that the buyer receives a third portion of the payment and the sellerreceives a fourth portion of the payment, in response to movement in abad direction, wherein the first portion is less than the third portionand the second portion is less than the fourth portion.
 20. Theapparatus of claim 16, wherein the instructions for distributing thepayment in a manner so that the buyer and seller each receive a portionof the payment based on the comparison of the actual and predictedoutcomes includes instructions for distributing the payment in a mannerso that the buyer receives a first portion of the payment and the sellerreceives a second portion of the payment, in response to the differenceof the actual and predicted outcomes falling outside of a first range,and instructions for distributing the payment in a manner so that thebuyer receives a third portion of the payment and the seller receives afourth portion of the payment, in response to the difference of theactual and predicted outcomes falling within the first range and outsideof a second range, wherein the first range is greater than the secondrange, wherein the third portion is less than the first portion, andwherein the fourth portion is less than the second portion.